MR. McCLELLAN: I know there's a lot of interest in tomorrow's speech,
and I wanted to come back here and do kind of a general preview of it
for you all for tomorrow, which I think will be helpful for everybody.
Tomorrow the President will focus his remarks on what we're doing to
address high gas prices in the short-run, as well as what we're doing to
eliminate the cause of high gas prices in the long-run. We have a
strong economy, but high gas prices are like, as you have heard the
President say, like an additional tax on families that are trying to
live within a budget, farmers and small businesses. It puts a strain on
working families and small businesses.

And the President will talk about why gas prices -- touch on why gas
prices are high. He will talk about how global demand for energy is
really rising faster than the global supply, because of countries like
China and India, and he'll talk about how gasoline demand is only
projected to increase this summer, and experts are projecting that gas
prices will remain high through the summer.

And he'll talk about how we're switching from one fuel mix to another,
transitioning from MTBE to ethanol in specialized fuel blends, and how
that is temporarily pushing gas prices up even more, as well.

So tomorrow the President is going the lay out a four-point plan that he
has for addressing high gas prices. Let me mention the four areas that
he'll cover. First, making sure that consumers and tax payers are
treated fairly -- and I'm going to talk a little bit more about that one
aspect in a minute -- promoting greater fuel efficiency is the second
area, boosting our gasoline supply at home is a third area, and then for
the long-term investing aggressively in alternatives to gasoline, so
that we can eliminate the root cause of high energy prices. And that's
where he'll really focus on the Advanced Energy Initiative, and how
we're working to transform the way we power our cars and trucks.

But anyway, jumping back to the first part of his plan. The first part
is to make sure that American consumers are treated fairly at the gas
pump. And the President will talk about how, at his direction, the
Federal Trade Commission is investigating whether the price of gasoline
has been unfairly manipulated in any way since the hurricanes struck
last year.

Q At his direction --

MR. McCLELLAN: Yes, at his direction, the Federal Trade Commission.

Q He's going to ask them to investigate, or they already are?

MR. McCLELLAN: Yes, at his direction, the Federal Trade Commission is
investigating.

Q Further?

MR. McCLELLAN: Whether the price of gasoline has been unfairly
manipulated. And also he's directed Department of Energy and Department
of Justice to conduct inquiries into possible cheating or illegal
manipulation in the gasoline markets. I think you all heard the
President say very clearly that we will not tolerate price gouging. And
so these are two important directives that the President has made.

Q He's directed Department of Justice and Department of Energy to do
what?

MR. McCLELLAN: To conduct inquiries into possible cheating or illegal
manipulation in the gasoline markets.

Q -- taking these now, or --

MR. McCLELLAN: This is what we're directing these agencies to do.

Q -- it's effective yet?

MR. McCLELLAN: Well, they are aware that he's directed them to do this,
so they are taking -- they are in the process of taking these steps.
And also tomorrow the Attorney General and the FTC will be sending a
letter out to all 50 states -- to all 50 state Attorney Generals,
because the state Attorney Generals have primary authority over price
gouging issues. On that letter I think they'll remind them to stay on
top of this, and they'll also talk about how the federal government is
here to assist in those efforts.

And then one other area in this first part of his plan that he'll talk
about is that energy companies -- he'll essentially call on energy
companies to reinvest their profits into expanding refining capacity,
developing new technologies, and researching alternative energy sources.
That's an important responsibility, and that's something he will touch
on in the remarks, as well.

That's the part I wanted to preview. There are some additional steps
that he's going to be talking about in the remarks tomorrow that we're
taking in the short-run, and he'll spell those out, but I wanted to
touch on that first part of the plan, and some of what he's talking
about there, as a preview for tomorrow.

Q Are these steps that he's directed -- these directions he's given
these departments, when did he do this? He's already done it?

MR. McCLELLAN: It's recently. He's already -- I'll check the specific
-- if there's a more specific time. But you heard him talk about price
gouging recently. So he'll talk about how, at his direction, these
agencies are taking these steps.

Q Was this like around the time of Hurricane Katrina, or more recently?

MR. McCLELLAN: No, this is recently, just recently.

Q Like the last couple weeks?

MR. McCLELLAN: I just told you, I'll try to give you a more specific
time. I'll come back here and be glad to share that with you.

Q Does the President think any of these specifics that he's going to
talk about tomorrow will bring down the price at the pump within the
next week or month?

MR. McCLELLAN: Well, if you'll recall, last week, and even before, we
talked about how -- in the long-run, to address rising gas prices, you
have to really address the root causes. And that's why the President
outlined a very bold initiative in the State of the Union to get us off
our dependence on foreign crude, or foreign oil. He's talked about how
we are addicted to oil. And so that's what you have to do in the
long-run, is eliminate that cause of high gas prices.

In the short-run, there are steps we can take to help address the
problem. And that's -- it's not only the steps I've mentioned just now,
those are some steps. But he's going to talk about some other steps
that we're taking as well to help address it in the short-run. This is
not something we got into overnight, it's not something we're going to
get out of overnight. But there are some steps we can take.

Q So will these actions help to bring down gas prices in the short term?

MR. McCLELLAN: It will help some in the short-run. But, again, the
reason why we are in this position is because of our dependence on
foreign oil and our addiction to oil, as the President has talked about.
So it requires a long-term solution.

Q I'm a little confused.

MR. McCLELLAN: We don't want you to be confused.

Q Yes, I know. The President has repeatedly said that the cause for
high gas prices is high global demand for oil. So what makes him
suspect that there's been any price manipulation when he already thinks
that global forces are pushing up the price of oil?

MR. McCLELLAN: It's important to make sure that there's not any price
gouging. The federal government has a responsibility to act, and we
share a commitment with congressional leaders to make sure that we are
acting to ensure that there is no price gouging. And that's what we
will continue to do. This is one part of steps we can take in the
short-run.

Q Is there a suspicion? Is there anything that has caused you to
suspect that there is market manipulation, as opposed to just high
demand?

MR. McCLELLAN: Well, gas prices are high right now, and that's why you
want to make sure there's not. And so that's what he's going to be
talking about in that context.

Q I'm confused again, too. If the President had already directed the
FTC and these other people to do these things, why did Frist and Hastert
write to him today asking him to --

MR. McCLELLAN: Well, when I say, "recently," he's just now directing
them to take these steps. That's why the letter is going out from the
Attorney General and the FTC. He talked about this last week a number
of times. And so that's the context in which you should look at it.
But we've been in close contact with Speaker Hastert and Leader Frist
about these issues. We are all on the same page when it comes to making
sure that there is no price gouging. And the President has said very
clearly that this is something we will not tolerate, particularly when
gas prices are high.

Q The President has a number of personal contacts, and the Vice
President has personal contacts in the oil industry. Has there been any
conversation between either of them with oil executives to try and get
them to either give assurances about market manipulation, or try and
bring down the price?

MR. McCLELLAN: We've previously talked about how all of us have a
responsibility to do our part when it comes to addressing high gas
prices. And that's something that we talked about before, and we're
continuing to talk about. Tomorrow the President is going to make very
clear, in a public way, that energy companies should reinvest those
profits that they're making back into new technologies and alternative
sources of energy. You know, if there are any updates on his calls, or
things like that, I'll be glad to share that with you at the appropriate
time.

Q What are two and three again? I missed those. Could you go
over those two?

MR. McCLELLAN: This is the part I'm previewing in the speech
today. The speech is being finalized, and there will be more tomorrow.
I didn't preview everything.

Okay, thank you.

* * * * *

MR. McCLELLAN: Okay, quick update. On the FTC investigating possible
price gouging, that was -- the President did direct the FTC to do that
in the aftermath of the hurricanes last fall.

And then on the Department of Energy and Department of Justice
conducting inquiries into possible cheating or illegal manipulation of
gasoline markets, that's really happened in the last few days. The
President will be publicly announcing it tomorrow.

Q The FTC thing, that was something that you guys had announced
previously?

MR. McCLELLAN: We had directed the FTC to do it in the aftermath of the
hurricanes.

Q Almost a year ago?

MR. McCLELLAN: We talked about it. The hurricanes were last September.

Q What's the status of that investigation?

MR. McCLELLAN: Well, the FTC could probably give you an update, in
terms of -- I think the Department of Energy even put out some
information last week, where they did some initial checks, and there
were reports -- there are ways for consumers to report possible
incidents of price gouging. They have a website and they have a
toll-free number that they can call into. I think to a large extent
people were acting appropriately, but they did find some instances where
there problems. And the Department of Energy or FTC can probably get
you more on that.

Q Fuel mix was -- the fuel mix change was after Katrina, and the FTC
and the Justice Department was, what did you say, the last several days?

MR. McCLELLAN: I'd say the last few days. This is something we've been
talking about with congressional leaders about doing, as well, and as
you saw in the letter from Speaker Hastert and Leader Frist.

Q Has he been working on the speech on this flight?

MR. McCLELLAN: He has been, yes, and he's also been visiting with the
Congress folks that are on board.